An Ontario Budget Office will help strengthen our democracy

BY DR. MURTAZA HAIDER

The June 7 election in Ontario presents the electorate with a choice between unabated public sector spending on infrastructure of dubious utility and a thoughtful response to the province’s growing public debt that has crossed over $300 billion.

The Ontario Liberals and the NDP are promising even more debt spending. The electorate, however, is no more informed now than before about the costs and benefits of the projects favoured and promised.

What is even more disturbing is a lack of information about competing alternatives for public sector spending that may deliver better value for money. What is needed is an independent, nonpartisan budget office at the provincial level, much like the Congressional Budget Office in the U.S., to provide context and background to spending decisions.

The controversy about the Scarborough subway extension is a case in point. Independent assessments of the two main alternatives to improve transit service in Scarborough — a one-stop subway versus a seven-stop light rail transit (LRT) — have repeatedly shown the LRT to be a better option, but Mayor John Tory and city council have repeatedly voted in favour of the inferior alternative.

At stake is wasteful spending of nearly $4 billion on a subway that is likely to increase commute times for most transit riders in Scarborough. Such decision-making thrives in the absence of an official and independent assessment of the two alternatives.

The same applies to all public-sector capital expenditure spending in health, education, and the rest. Governments, through their ministers, announce spending plans, such as the Hurontario LRT in Mississauga. The decision is usually based on consultants’ work that seldom finds evidence against a government-favoured project. A series of very optimistic projections for population and future use are made to justify spending on the pre-determined alternative.

Dr. Murtaza Haider is an associate professor at the Ted Rogers School of Management and adjunct professor of engineering at McGill University.

Bent Flyvbjerg, an Oxford University professor, explained in ‘Megaprojects and Risk’ how proponents of infrastructure projects systematically overestimate future revenues and underestimate costs to advance their favourite projects.

A lack of transparency remains because assumptions, data, models, and ad hoc decisions that lead to the selection of the favoured alternative are never disclosed.

The budget office, like the auditor general’s office, would be an independent entity with the mandate to provide objective estimates of costs and benefits of the planned projects and policies.

One may ask why a budget office is needed when the AG office is already in place. The answer is quite straightforward: The AG office mostly acts when wasteful spending has already taken place by auditing government programs.

What is needed instead are pre-emptive measures to stop the waste from happening by demanding evidence-based decision-making.

It would be naive to assume that such financial prudence will evolve by itself. A lack of transparency about SmartTrack stations favoured by the former transportation minister, Steven Del Duca, is one just example. While public-sector planners had warned against the wasteful spending, the taxpayers’ remained ignorant of such deliberations until journalists unearthed documents after struggling with numerous freedom of information requests.

Also note that the public-sector planners have repeatedly advised that since council did not ask planners to compare transit alternatives for Scarborough, they have not done so. Why? Because planners can only act when they are instructed to, thus creating a breeding ground for complacency and ignorance.

An informed electorate is critical for an effective and strong democracy. A lack of transparency, as is the case in Ontario, will lead to uninformed choices. The need of the hour is to strengthen our democracy by building institutions to promote awareness and accountability.

An Ontario Budget Office will help strengthen our democracy by generating independent estimates of competing political visions so that the electorate is better able to make informed choices.

Ontarians must ask those vying for their votes to promise a transparent government and a commitment to set up new independent institutions to help rebuild our democratic traditions.

Only then, we can move forward on building a prosperous economy for Ontario.

— Dr. Murtaza Haider is an associate professor at the Ted Rogers School of Management and adjunct professor of engineering at McGill University

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